The reverse mortgage securities market continues to show the side effects of the HECM product’s rough year.

Issuance for HECM mortgage-backed securities, or HMBS, fell to just under $614 million in January, down from December’s $619 million, according to recent data from New View Advisors.

But even though HMBS totals for the last two months have been significantly better than November’s dismal $521 million, analysts say don’t be fooled. Both December and January were helped along by highly seasoned pools of original collateral – or old loans.

January saw about $304 million in original new loan pools, and while this is up from December’s $277 million and November’s $298 million, it’s below the $325 million we saw in October and $360 that closed out September.

By comparison, January 2018 saw HMBS issuers sell $869 million in loan pools.

HMBS float also fell in January as payoffs to the Department of Housing and Urban Development continued to eclipse new issuance. With more than $900 million in payoffs, outstanding HMBS totaled $55.031 billion in January, down about $100 million in December.

New View predicts that HMBS float will fall below $55 billion by the end of February, which may create liquidity concerns for investors. For the last two years, float has stayed in the $55-$57 million range.

The numbers reflect a tough year for HMBS, which closed out 2018 with $9.6 billion, a drop from 2017’s $10.5 billion.

“The HMBS market will be hard pressed to equal last year’s totals, which also included HMBS issuance backed by new HECM loans originated at higher PLFs,” New View wrote.